Two Pharma Companies Fined Over 'Pay For Delay'; Novartis Unrepentant About Suffering Caused

from the profits-before-patients dept

Back in April of this year, we wrote about a spate of investigations around the world into "pay for delay" deals, whereby a big pharma company essentially buys off manufacturers of generics so that the former can continue to enjoy monopoly pricing long after its patents have expired. One of those involved the European Union, and the two pharma companies Johnson & Johnson and Novartis. As PharmaTimes reports, fines are being imposed on them for their actions:

The European Commission has fined Johnson & Johnson (J&J) just under 10.8 million euros and Novartis 5.49 million euros, after finding that their subsidiaries in the Netherlands had agreed an anticompetitive deal aimed at delaying the market entry there of a generic version of the painkiller Duragesic (fentanyl), thus breaching European Union (EU) antitrust rules.

Of course, such sums are little more than a wrist slap for pharma giants, but it's nonetheless good to see the European Commission making clear that this anti-competitive behavior is not acceptable in the EU:

The payment by J&J to Novartis "shockingly deprived patients in the Netherlands, including people suffering from cancer, from access to a cheaper version of this medicine," said Joaquin Almunia, the European Commission vice president in charge of competitive policy.

Despite that fact, with the likelihood that cancer patients were probably in more pain than was necessary, some remain in denial:

In a statement, Novartis and [its subsidiary] Sandoz say they "reject the Commission's allegation that the 2005 co-promotion agreement was intended to deprive patients in the Netherlands of cheaper medicines."

Whether or not that was the "intention", it was the inevitable effect, and quibbling over the difference shows the moral squalor of companies like Novartis that regard additional suffering of cancer patients as some kind collateral damage that can be ignored in the cause of pumping up their profits.

Reader Comments

The fine should be calculated with the sales of the generics prior to the acquisition plus expected growth in sales. It should be to the tune of hundreds of millions or more depending on how long it was allowed to go on. You know what was a good slap? BP paying 10+ BILLIONS (with a B) to compensate for the disaster in the Gulf. This is the kind of penalty a huge company has to take to effectively discourage future bad behavior.

Re:

How's this for a punishment: any company found to be guilty of this sort of thing is barred from selling in that country's market for a period equal to the duration they artificially kept competing generics off the market.

Alternatively, all of the company's patents in that country are shortened in duration equal to the amount of time the generics were artificially kept from market.

This is common

Ooooh! Vicious! (not!)

The European Commission has fined Johnson & Johnson (J&J) just under 10.8 million euros and Novartis 5.49 million euros,

Gosh, I'm so impressed. With Johnson & Johnson's net worth around $65BN that 11 million is a real disincentive to stop ripping off consumers and killing people... yes siree, that 0.017% of net worth fine is really gonna show them and make them change their ways....

Still the movie there shows how people will go to great lengths to do what they know it is right, laws or no laws, most people have two good eyes they can see it, they don't need others to explain to them what are they are seeing in most cases. I am talking about the real life here not the movie.

the European Commission need to be very careful and very watchful now because if the USA/EU deal under TAFTA/TTIP are allowed to come in, the companies will be suing the EU for lost profits by letting generic drugs on to the market!

EU, YOU HAVE BEEN WARNED! KILL THIS TAFTA/TTIP DEAL AND KEEP OUT OF ANY FUTURE ONES WITH THE USA!

What did you expect?

Here in the US those companies have a fiduciary responsibility *by law* to maximize shareholder value. Suppressing cheaper competition fulfills that responsibility, whereas suppressing patients' pain does not.

Re: Ooooh! Vicious! (not!)

Re: Re:

The problem with that is in many cases there are no alternatives. If you do that, you end up making sure more patients don't get access to the drug (you suddenly restrict brand) and more people suffer. It's no longer hurting just the people who can't afford/get brand medication - you're hurting the people who were on brand prior to this mess.

I do however like the shortened duration of patents idea. That'll ensure the patients still have access to needed medication but the company will feel the sting of pulling these kinds of things when generics get released by other companies (which in turn would give greater access to patients who couldn't afford/use brand medication).

Big Pharma laughed at this

Sure, they got fined millions of dollars for doing the 'pay for delay' in the EU countries.

I rather doubt it will happen here, as the FDA is a compliant and toothless wonder when it comes to Big Pharma. They'll allow anything on the market-literally, without all that pesky drug testing that is supposed to go with it. They've been accused of allowing many drugs on the market to be released with shoddy testing behind them, only to find that the drug makers themselves were rigging the system.

How many people have been harmed by this? I don't even want to know-but I'm sure it's in the thousands.

Until the FDA does something more substantial than pat them on the back for not getting caught at releasing dangerous drugs, Big Pharma will continue to do so.

"...the former can continue to enjoy monopoly pricing long after its patents have expired."

I can only speak to the US (not Europe), and within the US the above comment is incorrect. The generic manufacturer who has entered into one of these arrangements is absolutely permitted to engage in the generic market on the very day that the patent expires. The patent now being past tense, the patent holder is now a former patent holder.

Re:

Maybe you misunderstood the story.

Just because legally the generic manufacturer is not bound by a patent, doesn't stop the former patent holder keeping hold of the market. See Lipitor related link in post above entitled "this is common".

Re:

If, according to just about every 'free trade' agreement/proposal of the last twenty years, a corporation can sue governments for 'lost profits' when their business plans are blocked by, say, a country's constitution, then the generics must be even more able to sue for 'lost profits.

Re: Re: Re:

The problem with that is in many cases there are no alternatives. If you do that, you end up making sure more patients don't get access to the drug (you suddenly restrict brand) and more people suffer. It's no longer hurting just the people who can't afford/get brand medication - you're hurting the people who were on brand prior to this mess.

If the generic version is exactly equivalent (which I believe is the idea), then how is that a problem? The people who were on the more expensive form can just switch to the cheaper generic, and proceed without issues.